Question

roduce Company needs to know the pounds of bananas to have on hand each day. Each pound of bananas costs $.25 and can be sold for $.40 Unsold bananas are worthless at the end of the day. The following demands were found after studying the last six months sales: 200 pounds of bananas one fourth of the time. 300 pounds of bananas one half of the time 400 pounds of bananas one half of the time required determine whether ABC grocery should order 200,300 or 400 pounds of banans

Answer 1

	Past Trend Demand	Time	Demand * Time
	200	1/4	50
	300	1/2	75
	400	1/2	100
	Average Demand		225
	Since the demand above is between 200 & 300.We need to do additional Analysis
	Comparative Statement:
	Order Size	200	300
	Sales(200*0.40)/(225*0.40)	80	90
	Less: Cost of Material	50	75
	(200*0.25)/(300*0.25)
	Net Benefit	30	15
	Since company has more benefit in Selling & Ordering 200 Units it should do so
	200

	Past Trend Demand	Time	Demand * Time
	200	1/4	50
	300	1/2	75
	400	1/2	100
	Average Demand		225
	Since the demand above is between 200 & 300.We need to do additional Analysis
	Comparative Statement:
	Order Size	200	300
	Sales(200*0.40)/(225*0.40)	80	90
	Less: Cost of Material	50	75
	(200*0.25)/(300*0.25)
	Net Benefit	30	15
	Since company has more benefit in Selling & Ordering 200 Units it should do so
	200